Judgement of the Dnipropetrovsk Region Court of Appeals, dated August 18, 2014, case No. 191/215/14-ц. Available at http://www.reyestr.court.gov.ua/Review/40234833

The plaintiff (a legal entity) and the defendant concluded an employment agreement under which the defendant was employed as a sales manager.

The provisions of the employment contract prohibiting the defendant within three years after termination or expiration, for whatever reason, of the employment contract from direct or indirect engaging into any activity similar to that conducted by the plaintiff or from competing with the plaintiff, or from self-employment, or prohibiting from working as a member of any partnership or legal entity, or as a consultant, shareholder, investor, employee, officer or director of any company or other legal entity, as well as the provisions about fines, violate rights of the defendant and are contrary to law.

Judgement of the Chervonozavodskiy District Court of the city of Kharkiv, dated November 06, 2009, case No. 2-397/09. Available at http://www.reyestr.court.gov.ua/Review/8500516

The plaintiff (a legal entity) and the defendant entered into an employment contract under which the defendant was employed as a head of the regional branch of the plaintiff. Clauses 3.1, 3.2 of the employment contract provided that during the effective term of the contract the defendant, her close relatives and family members should not be entitled without written consent of the plaintiff to act as a founder and employee of other legal entities, other than those affiliated with a certain company (related to the plaintiff) that are engaged into courier delivery of printed information and promotional publications and other materials, to be founders or members of media, to be engaged into advertising business. The defendant, her close relatives and family members within three years after termination or expiration of the contract should not be entitled to directly or indirectly engage into the business of courier delivery of advertising, informational and other materials, as well as publishing free of charge promotional and informational publications.

The Ukrainian Constitution sets forth that everyone shall have the right to work.

In accordance with Article 5-1 of the Ukrainian Labor Code the state provides that citizens shall have a free choice of their type of activity.

In accordance with Article 9 of the Ukrainian Labor Code provisions of employment contracts that worsen the position of employees compared to the labor legislation of Ukraine are invalid.

Considering the above, the provisions of clauses 3.1. and 3.2. of the employment contract in question are invalid, as they not only worsen the position of the defendant, but also the position and rights of her relatives.

Resolution of the Higher Commercial Court of Ukraine, dated May 24, 2016, case No. 910/15796/15. Available at http://reyestr.court.gov.ua/Review/58128614 

The plaintiff (a legal entity) based their claims on Service Provision Agreement No. 29102013 of October 29, 2013, namely its clause 3.2.5 under which the parties had agreed that if during the effective term of the Agreement and within two years from the date of termination of the one the defendant (an individual entrepreneur) entered into a similar agreement with a client of the plaintiff (or with any of affiliated enterprises or separate subdivisions of companies who were clients of the plaintiff) for provision of services and/or performance of work related to informational technologies specified by the Agreement or for provision of similar services and/or works, or entered into agreements having similar and/or the same subject matter, including entering into an employment agreement, should be obliged to pay UAH 10.500 as a compensation to the plaintiff for each entering into a respective agreement.

Clause 3.2.5 of Service Provision Agreement No. 29102013 of October 29, 2013 limits the constitutional right of the defendant, in particular, to the work he freely chooses or freely agrees to.

In accordance with Article 228 (1) (2) of the Ukrainian Civil Code an agreement shall be considered violating the public order if it was aimed at violating constitutional rights and freedoms of an individual, and such an agreement shall be null and void.

The court ruled that the provisions of clause 3.2.5 of service provision agreement No. 29102013  violate the principle of freedom of contract because they established adverse consequences in advance in case the defendant concluded any agreement on provision of services and/or performance of work related to informational technologies.

© Yuriy Karlash, English translation, 2019

© Yuriy Karlash, compilation, 2019